Grimes and Plain Weekly Hog Outlook

CHICAGO - Jul 21/07 - SNS -- Following is a week ending hog market comment from the University of Missouri - Columbia's Glenn Grimes and Ron Plain.

Pork exports for May were down 10.1 percent from a year earlier. The declines were Mexico down 47.02 percent, Russia down 36.36 percent, South Korea down 24.36 percent, Caribbean down 11.23 percent and other down 18.91 percent.

For January-May, pork exports were down 2.86 percent from 12 months earlier. By country our exports for January-May were: Japan up 11.53 percent, Canada up 2.47 percent Mexico down 29.12 percent, Russia down 23.33 percent, Mainland China and Hong Kong up 6.47 percent, Taiwan down 41.2 percent, Caribbean down 28.76 percent and other up 0.71 percent.

Pork imports for May were up 9.01 percent from a year earlier. Pork imports from Canada were down 0.01 percent for January-May, Denmark down 12.68 percent, Poland up 20.88 percent, Netherlands down 95.1 percent, Hungry down 54.45 percent and other up 13.96 percent. Total pork imports for January-May 2007 were down 1.71 percent from 12 months earlier.

Net pork exports for the first five months of the year declined by 0.55 percent of production from last year. The net pork exports as a percent of production for January-May were 10.12 percent in 2006 and 9.57 percent in 2007. The growth in live hog demand of 3.8 percent for January-May appears to all be from the domestic market.

Live hog imports from Canada during May were up 25.24 percent from 12 months earlier. For January-May live hog imports were up 12.32 percent, feeder pig imports were up 11.3 percent and slaughter hog imports were up 14.71 percent from a year earlier.

We expect live hog imports from Canada to continue to grow for some time. We probably will get more feeder pigs as well as more slaughter hogs. The strength of the Canadian dollar relative to he U.S. dollar is challenging the Canadian producers to be as low cost as U.S. producers and the U.S. packing industry is more efficient then the Canadian industry.

USDA in their most recent forecast of U.S. pork exports for 2007 are forecasting exports to be down some from 2006. If pork exports from U.S. are down this year from last it will break a string of 15 years of record high exports each year.

Following two weeks of price declines the hog market stabilized this week and gained some from last weeks close. Live hog prices Friday morning were down $0.75 to up $4.00 per cwt compared to seven days earlier. The weighted average negotiated carcass price this Friday morning were up $0.56 to 2.29 per cwt compared to a week earlier.

The top live prices Friday morning for select markets were: Peoria $46.00 per cwt, St Paul $50.00 per cwt and interior Missouri $47.50 per cwt. The weighted average negotiated carcass price by geographic area was: Western Cornbelt $68.34 per cwt, Eastern Cornbelt $65.10 per cwt, Iowa-Minnesota $68.50 per cwt and National $66.67 per cwt.

The cutout value per cwt of carcass improved some this week. The cutout for Thursday afternoon at $76.14 per cwt up $3.06 per cwt from seven days earlier. Loins were up $2.57 per cwt at $91.86 per cwt, Boston Butts were up $0.16 at $75.17 per cwt, hams at $63.13 per cwt up $7.28 per cwt and bellies at $103.48 per cwt up $0.10 per cwt from Thursday afternoon last week.

Cash feeder pig prices were some lower this week than two weeks ago at united Tel-O-auction but an indication of stronger demand. The prices this week at united by weighted groups were:40-50 pounds $75 per cwt, 50-60 pounds $70-83 per cwt and 60-70 pounds $61.50 per cwt.

Slaughter this week under Federal Inspection was estimated at 1961 thousand head up 0.7 percent from a year earlier.

Issued by Glenn Grimes and Ron Plain

University of Missouri - Columbia

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